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A-9-2023-0444 → TA-9-2024-0312

From
A-9-2023-0444 Plenary report of 15 Dec 2023
To
TA-9-2024-0312 Adopted text of 23 Apr 2024
Changes
56 changes to the text
Paragraphs
+38 added · −58 removed · 41 changed
More facts (2)
Title (from)
on the proposal for a Council regulation amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure
Title (to)
Speeding up and clarifying the implementation of the excessive deficit procedure – amending Regulation
Cite Link to this page

Changes that matter, 56

Changes to the text in document order — the ones the change notes describe. Cover page, renumbering and punctuation-only edits are left out (see “Every difference”); changes to citations and references stay in and are marked as formal in the notes.

Change 1

Changed1. Approves the CommissionCouncil proposaldraft as amended;

Change 2

Removed2. Calls on the Commission to alter its proposal accordingly, in accordance with Article 293(2) of the Treaty on the Functioning of the European Union;

Change 3

Changed4.3. Asks the Council to consult Parliament again if it intends to substantially amend the Commissionits proposal;draft;

Change 4

RemovedAMENDMENTS BY THE EUROPEAN PARLIAMENT*

Removedto the Commission proposal

Removed---------------------------------------------------------

Removed2023/0137 (CNS)

RemovedProposal for a

RemovedCOUNCIL REGULATION

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Removedamending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure

Change 5

Changed(5) The economic governance framework of the Union should be adapted to better take into account the growingincreased heterogeneity of fiscal positions, sustainabilitypublic risksdebt, economic challenges and other vulnerabilities across Member States. The strong policy response to the COVID-19 pandemic proved highly effective in mitigating the economic and social damageconsequences of the crisis, but resulted in a significant increase in public- and private-sector debt ratios, underscoring the importance of reducing debt ratios and deficits to prudent levels in a gradual, realistic, sustained and growth-friendly mannermanner, allowing leeway for counter-cyclical policies and addressing macroeconomic imbalances, while paying due attention to employment and social objectives. At the same time, the economic governance framework of the Union should be adapted to help address the medium- and long-term challenges facing the Union, including achieving a fair digital and green transition, including the Climate Law, ensuring energy security, supporting open strategic autonomy, addressing demographic change, strengthening social and economic resilience,resilience and sustained convergence, and implementing the strategic compass for security and defence, all of which requires reforms and sustained high levels of investment in the years to come.

Change 6

Changed(6) The economic governance framework of the Union should put debtpromote sustainabilitysound and sustainable growthpublic atfinances itsand coresustainable and inclusive growth and therefore differentiate between Member States by taking into account their public debt and economic challenges and allowing multi-annual country-specific fiscal trajectories.trajectories, while ensuring effective multilateral surveillance and respecting the principle of equal treatment.

Change 7

Changed(7) At the same time, to ensure a transparent and common Union framework based on the reference values referred to in Article 126(2) TFEU and Protocol No 12 on the excessive deficit procedure annexed to the TFEU and the Treaty on the European Union (TUE),(TEU), stronger enforcement underpinning multilateral surveillance should be the necessary counterpart of a risk-based surveillance framework that allows for country-specific fiscal trajectories.

Change 8

Changed(8) In order to simplify the Union fiscal framework and increase transparency, a single operational indicator anchored in debt sustainability should serve as a basis for setting the fiscalnet expenditure path and carrying out annual fiscal surveillance for each Member State. That single indicator should be based on nationally financed net primary expenditure, that is to saysay: government expenditure net of discretionary revenue measures and excluding interest expenditureexpenditure, asdiscretionary wellrevenue asmeasures, cyclicalexpenditure unemploymenton expenditure,programmes ▌expenditureof onthe Union programmes fully matched by revenue from Union funds,funds and national expenditure on co-financing of programmes funded by the UnionUnion, capas withwell aas limitcyclical elements of 0.25%unemployment ofbenefit GDP,expenditure. cyclicalIn elementsline ofwith unemployedthe benefitguiding expenditure,principles andthat costshave relatedbeen toused theby borrowingthe ofEuropean fundsCommission for theclassifying loanstransactions relatedas toone-offs, theone-offs nationaland Recoveryother andtemporary Resiliencemeasures Facilityshould Plans.also be excluded from net expenditure. This indicator allows for macro-economic stabilisation as it is not affected by the operation of automatic stabilisers, including revenue and expenditure fluctuations outside the direct control of the government.

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Change 9

Changed(10) To strengthen the EDP for breaches of the debt criterion of 60 % of GDP (‘debt-based EDP’), referred to in Article 126(2) TFEU and Protocol No 12 the focus should be on departures from the fiscalnet expenditure path set by the Council under Regulation (EU) […] of the European Parliament and of the Council.

Change 10

Changed(11) On the basis(13) ofIn Articleaccordance 126(2)with TFEU,Articles the24 deficitand criterion25 isof alsoRegulation fulfilled(EU) where[on the excesspreventive overarm], the referenceCouncil, valuefollowing ofa 3recommendation %from ofthe GDPCommission, iscould onlyallow exceptionalMember andStates temporaryto anddeviate from the rationet remainsexpenditure closepath toset by the referenceCouncil value.under Therefore,that aRegulation temporaryin breachthe thatevent remainsof closea tosevere theeconomic referencedownturn valuein shouldthe noteuro leadarea toor the openingUnion ofas a deficit-basedwhole, EDPor ifin itthe resultsevent fromof exceptional circumstances outside the control of the government with a major impact on the public finances of the Member State concerned, whichprovided includesthat it does not endanger fiscal sustainability in the medium term. As a severeconsequence, economicsuch downturna deviation should not be registered in the Membercontrol Stateaccount concerned.nor lead to the opening of a debt-based EDP.

Change 11

Removed(12) Moreover, in case of a severe economic downturn in the euro area or the Union as a whole, and following the application of Article 24 of Regulation (EU) [on the preventive arm], the Commission and the Council may decide not to conclude on the existence of an excessive deficit.

Added(14) When assessing the existence of an excessive deficit in accordance with Article 126(3) TFEU, the Commission should take into account all relevant factors. Substantial public debt challenges in the Member State concerned should be considered a key aggravating factor.

Removed(13) In accordance with Articles 24 and 25 of Regulation (EU) [on the preventive arm], the Council, following a recommendation from the Commission, can allow Member States to deviate from the net expenditure path set by the Council under that Regulation in the event of a severe economic downturn in the euro area or the Union as a whole, or in the event of exceptional circumstances outside the control of the government with a major impact on the public finances of the Member State concerned, provided that it does not endanger fiscal sustainability in the medium term. As a consequence, such a deviation should not lead to the opening of a debt-based EDP.

Added(14a) Acknowledging the rising geopolitical tensions and security challenges and the corresponding need for Member States to build-up their capabilities, the increase of government investment in defence, where applicable, should be considered as a relevant factor when assessing the existence of an excessive deficit in accordance with Article 126(3) TFEU. This factor could be assessed against EU averages, medium-term trends or other relevant benchmarks, considering also the statistical rules concerning the time of recording of military equipment expenditure.

Removed(14) When assessing the existence of an excessive deficit in accordance with Article 126(3) TFEU, the Commission should take into account, as a key relevant factor, the degree of debt challenge in the Member State concerned. A substantial public debt challenge established according to the most recent Debt Sustainability Monitor should be considered a key factor leading to the opening of an EDP as a rule. Since, in accordance with Article 126(3) TFEU, the Commission is to take into account all other relevant factors, in so far as they significantly affect the assessment of compliance with the deficit and debt criteria by the Member State concerned, that should include in particular the developments in the medium-term economic position and the developments in the medium-term budgetary position, and the delivery and commitment by the Member State on the implementation of the investments and reforms to address the common priorities of the Union as set out in Article 12 of Regulation (EU) [on the preventive arm], the reforms and investments committed in the national plans of the Recovery and Resilience Facility, Cohesion Funds and future EU investments instruments that serve the same purpose. In order to increase national ownership, the independent fiscal institutions referred to in Article 8 of Council Directive [on the national budgetary frameworks], should provide an opinion on the relevant factors.

Added(15) To keep track of actual deviations from the net expenditure path as set out in Article 21 of Regulation (EU) [on the preventive arm], the Commission should set up a control account for each Member State summing annual deviations over time. The information in the control account should be the basis of enforcement actions. In particular, the Commission shall prepare a report in accordance with Article 126(3) TFEU when the ratio of the government debt to GDP exceeds the reference value, the budgetary position is not close to balance or in surplus and when the deviations recorded in the control account of the Member State exceed the established annual or cumulative thresholds. The budgetary position shall be considered close to balance if the headline deficit does not exceed 0,5 percentage points of GDP.

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Removed(15) To keep track of actual and planned annual deviations from the net expenditure path as set out in Annex IV to Regulation (EU) [on the preventive arm], the Commission should set up a control account for each Member State summing those deviations over time. The information in the control account should be the basis of enforcement actions, in particular of a report pursuant to Article 126(3) TFEU following a deviation from the net expenditure path. At the same time, the degree of ambition of the net expenditure path in the national medium-term fiscal-structural plan referred to in Regulation (EU) [on the preventive arm] should be considered when deciding on the opening of a debt-based EDP. In particular, if the Member State’s net expenditure path set by the Council is more ambitious than the medium-term reference trajectory ▌ in accordance with Regulation (EU) [on the preventive arm] and the deviation from the path is not significant when measured against this trajectory, the opening of an excessive deficit procedure should be avoided.

Added(16) The corrective net expenditure path under the EDP should bring or keep the general government deficit below the reference value of 3 % of GDP referred to in Article 126(2) TFEU and Protocol No 12 by the deadline established by the Council. The corrective net expenditure path under the EDP would in principle be the one originally set by the Council, while taking into account the need to ensure a minimum structural adjustment of 0.5 % of GDP in case of a breach of the deficit criterion or the need to correct the deviation from that path as a rule in case of a breach of the debt criterion. In case the original path is no longer feasible, due to objective circumstances, the Council should be able to set a different path under the EDP.

Removed(16) The corrective net expenditure path under the EDP should bring or keep the general government deficit durably below the reference value of 3 % of GDP referred to in Article 126(2) TFEU and Protocol No 12 by the deadline established by the Council. The corrective net expenditure path under the EDP should also ensure sufficient progress during the period covered by the recommendation regarding putting the projected debt ratio on a plausibly downward path or remaining at a prudent level. When setting the corrective net expenditure path under the EDP, the Council should also ensure that there is no back-loading of the required fiscal adjustment effort. The corrective net expenditure path under the EDP would in principle be the one originally set by the Council, while taking into account the need to correct the deviation from that path. In case the original path is no longer feasible, due to objective circumstances, the Council should be able to set a different path under the EDP.

Added(17) For Member States under an EDP, the Council, on a recommendation from the Commission, should continue to be able to extend the deadline for the correction of the excessive deficit where it establishes the existence of a severe economic downturn in the euro area or in the Union as a whole in accordance with Article 24 of Regulation (EU) [on the preventive arm], or in the case of exceptional circumstances outside the control of the government with a major impact on the public finances of an individual Member State in accordance with Article 25 of Regulation (EU) [on the preventive arm], and provided that it does not endanger fiscal sustainability in the medium term.

Removed(17) For Member States under an EDP, the Council, on a recommendation from the Commission, should continue to be able to extend the deadline for the correction of the excessive deficit where it establishes the existence of a severe economic downturn in the euro area or in the Union as a whole in accordance with Article 24 of Regulation (EU) [on the preventive arm], or in the case of exceptional circumstances outside the control of the government with a major impact on the public finances of an individual Member State and provided that it does not endanger fiscal sustainability in the medium term. Such extension should require that the overall size of the shock exceeds a normal range, for example costs of natural disasters should be anticipated within bandwidths.

Change 12

Changed(19) Independent fiscal institutions have proven their capacity to foster fiscal discipline and strengthen the credibility of Member States’ public finances. In order to enhance national ownership, the role of independent fiscal institutions,institutions traditionallyshould mandatedbe tomaintained monitorin compliancethe withreformed economic governance framework of the nationalUnion, framework,with a view to gradually building up their capacities. A more independent European Fiscal Board should beplay expandeda tomore prominent advisory role in the economic governance framework of the Union.

Change 13

Changed(23) This Regulation is part of a package together with Regulation (EU) [on the preventive arm] and Directive (EU) […] amending 2011/85/EU on requirements for budgetary frameworks of the Member States. Together, they establish a reformed Union economic governance framework that incorporates into Union law the substance of Title III ‘Fiscal Compact’ of the Treaty on Stability, Coordination and Governance (TSCG) in the Economic and Monetary Union, in accordance with Article 16 thereof. By building on the experience with the implementation of the TSCG by the Member States, the proposed legislative package retains the Fiscal Compact’s medium-term orientation as a tool to achieve budgetary discipline and growth promotion. The package includes a strengthened country-specific dimension aimed at enhancing national ownership, including by means of amaintaining strongerthe role forof independent fiscal institutions, which draws on the Fiscal Compact’s common principles proposed by the Commission in accordance with Article 3(2) of the TSCG. The analysis of expenditure net of discretionary revenue measures for the overall assessment of compliance required by the Fiscal Compact is set out in Regulation (EU) [on the preventive arm]. As in the Fiscal Compact, temporary deviations from the medium-term plan are allowed only in exceptional circumstances in accordance with Articles 24 and 25 in Regulation (EU) [on the preventive arm].arm] Similarly,and in line with the provisions on the control account. In a similar vein to the Fiscal Compact, in case of significant deviations from the medium-term plan, measures should be implemented to correct the deviations over a defined period of time. The package strengthens fiscal surveillance and enforcement procedures to deliver on the commitment of promoting sound and sustainable public finances and sustainable and inclusive growth. The economic governance framework reform, thus, retains the fundamental objectives of budgetary discipline and debt sustainability set out in the TSCG.

Change 14

Added(24a) Whereas the rules of the deficit-based Excessive Deficit Procedure remain unchanged with a minimum annual structural improvement of at least 0,5% of GDP as a benchmark, against the backdrop of the significantly changed interest rate environment, the Commission may, for a transitory period in 2025, 2026 and 2027 – in order not to compromise the positive effects of the Recovery and Resilience Facility – adjust the benchmark to take into account the increase in interest payments when setting the proposed corrective path relating to the first medium-term fiscal-structural plan for the years 2025, 2026 and 2027 within the Excessive Deficit Procedure, provided the Member State concerned fulfils the conditions laid out in Article 11 paragraph (c) of Regulation (EU) on the preventive arm, consistent with the objective of achieving a green and digital transition and the build-up of defense capabilities.

Change 15

AddedArticle 1

Change 16

Changed1. This Regulation lays down the provisions for speeding up and clarifying the implementation of the excessive deficit procedure. The objective of the excessive deficit procedure is to deter excessive government deficits and, if they occur, to further prompt their correction, where compliance with the budgetary discipline is examined on the basis of the government deficit and government debt criteria.

Change 17

Removed2. For the purposes of this Regulation, the following definitions apply:

Added2. For the purposes of this Regulation, ‘participating Member States’ means those Member States whose currency is the euro. The definitions under Article 2 of the Regulation (EU) [on the preventive arm] apply.

Removed(a) ‘participating Member States’ means those Member States whose currency is the euro;

AddedArticle 2

Change 18

Changed(b)1. ‘netThe expenditure’excess meansof the government expendituredeficit netover ofthe interestreference expenditure,value discretionaryshall revenuebe measuresconsidered andexceptional, otherin budgetaryaccordance variableswith outsideArticle the126(2), controlsecond indent, point (a), of the government, expenditureTreaty on programmesthe Functioning of the European Union fully(TFEU), matchedif byit Unionresults fundsfrom revenue,the nationalexistence expenditureof ona co-financingsevere ofeconomic programmesdownturn fundedin bythe euro area or the Union cap withas a limit ofwhole 0.25%established ofby GDP,the cyclicalCouncil elementsin ofaccordance unemployedwith benefitArticle expenditure,24 andof costsRegulation related(EU) to[on the borrowing ofpreventive fundsarm] foror thefrom loansexceptional relatedcircumstances tooutside the national Recoverycontrol andof Resiliencethe Facilitygovernment Plans,with asa definedmajor inimpact Articleon 2,the pointpublic (2)finances of Regulationthe (EU)Member ofState theconcerned, Europeanin Parliamentaccordance andwith Article 25 of theRegulation Council(EU) [on the preventive arm]*;arm].

Change 19

Removed(c) ‘reference trajectory’ means for each Member State with public debt above the 60% of gross domestic product (GDP) reference value or government deficit above the 3% of GDP reference value, the net expenditure trajectory put forward by the Commission, following an optional presentation of a proposal by each Member State concerned and the dialogue referred to in Article 7(1a) of Regulation (EU) [on the preventive arm];

Removed(d) ‘net expenditure path’ means the multi-annual trajectory for net expenditure of a Member State as set by the Council in accordance with Regulation (EU) [on the preventive arm];

Removed(e) ‘control account’ means a record of a Member State’s cumulated deviations of the actual net expenditure from the net expenditure path.

Removed1. The excess of a government deficit over the reference value shall be considered exceptional, in accordance with Article 126(2), second indent, point (a), of the Treaty on the Functioning of the European Union (TFEU), where the Council has established the existence of a severe economic downturn in the euro area or the Union as a whole in accordance with Article 24 of Regulation (EU) [on the preventive arm] or of exceptional circumstances outside the control of the government with a major impact on the public finances of the Member State concerned, in accordance with Article 25 of Regulation (EU) [on the preventive arm].

Change 20

Changed1a. When it exceeds the reference value, the ratio of the government debt to gross domestic product (GDP)GDP shall be considered sufficiently diminishing and approaching the reference value at a satisfactory pace in accordance with Article 126(2), point (b), TFEU if the Member State concerned respects its net expenditure path.

Change 21

Removed2. The Commission and the Council, when assessing and deciding upon the existence of an excessive deficit in accordance with Article 126(3) to (6) TFEU, may consider an excess over the reference value resulting from a severe economic downturn as exceptional in the sense of Article 126(2), second indent, point (a), TFEU where the Council establishes the existence of exceptional circumstances in accordance with Article 25 of Regulation (EU) [on the preventive arm].

Added2. The Commission shall prepare a report in accordance with Article 126(3) TFEU when the ratio of the government debt to GDP exceeds the reference value, the budgetary position is not close to balance or in surplus and when the deviations recorded in the control account of the Member State either exceed:

Removed3. The Commission, when preparing a report under Article 126(3) TFEU, shall take into account as a key relevant factor the degree of debt challenges in the Member State concerned. In particular, where the Member State faces substantial public debt challenges according to the most recent Debt Sustainability Monitor, it shall be considered a key factor leading to the opening of an excessive deficit procedure as a rule.

Added(a) 0,3 percentage points of GDP annually, or

RemovedThe Commission shall also take into account as a relevant factor the delivery and commitment by the Member State on the implementation of the investments and reforms to address the common priorities of the Union referred to in Article 12, point (ba), of Regulation (EU) [on the preventive arm], the reforms and investments committed in the national plans of the Recovery and Resilience Facility, Cohesion Funds and any future Union investment instruments that serve the same purpose, as well as all other relevant factors as indicated in Article 126(3) TFEU, in so far as they significantly affect the assessment of compliance with the deficit and debt criteria by the Member State concerned.

Added(b) 0,6 percentage points of GDP cumulatively.

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Added3. The Commission, when preparing a report under Article 126(3) TFEU, shall take into account all relevant factors as indicated in that Article, in so far as they significantly affect the assessment of compliance with the deficit and debt criteria by the Member State concerned.

Change 22

Removed(a) the developments in the medium-term economic position, in particular inflation developments and cyclical developments compared to the assumptions underlying the net expenditure path;

Added(a) the degree of public debt challenges based on the methodology referred to in Article 8 of Regulation [on the preventive arm], the evolution of the government debt position and its financing, and the related risk factors, in particular the maturity structure, the currency denomination of the debt and contingent liabilities, including any implicit liabilities related to ageing and private debt;

Change 23

Changed(b) the developments in the medium-term budgetary positions, including, in particular, the size of the actual deviation from the net expenditure path, in annual and cumulative terms as measured by the control account, and the extent to which the deviation is due to a severe economic downturn in the euro area or in the Union as a whole or to exceptional circumstances outside the control of the government with a major impact on the public finances of the Member State concerned in accordance with Articles 24 and 25 of Regulation (EU) [on the preventive arm]. Where relevant, the deviation compared to the reference trajectory shall also be taken into account when considering the size of the deviation;account;

Change 24

Removed(c) the evolution of the government debt position and its financing, and the related risk factors, in particular the maturity structure, the currency denomination of the debt and contingent liabilities;

Added(c) the developments in the medium-term economic position, including potential growth, inflation developments and cyclical developments compared to the assumptions underlying the net expenditure path;

Change 25

Changed(d) the progress in the implementation of reforms and investmentsinvestments, including,including in particular policies to prevent and correct excessive macroeconomic imbalances and policies to implement the common growth and employment strategy of the UnionUnion, including those supported by NextGenerationEU, and the overall quality of public finances, in particular the effectiveness of national budgetary frameworks.frameworks;

Change 26

RemovedThe Commission shall give due and express consideration to any other factors which, in the opinion of the Member State concerned, are relevant in order to comprehensively assess compliance with deficit and debt criteria and which the Member State has put forward to the Council and the Commission. In that context, particular consideration shall be given to financial contributions to fostering international solidarity and achieving the policy goals of the Union. The opinion submitted to the Commission by the Member State concerned shall include the opinion of its national independent fiscal institution on relevant factors.

Added(da) the increase of government investment in defence, where applicable, considering also the time of recording of military equipment expenditure.

Removed4. The Council and the Commission shall make a balanced overall assessment of all the relevant factors, specifically, the extent to which they affect the assessment of compliance with the deficit and/or the debt criteria as aggravating or mitigating factors.

Added4. The Commission shall give due and express consideration to any other factors which, in the opinion of the Member State concerned, are relevant in order to comprehensively assess compliance with the deficit and debt criteria and which the Member State has put forward to the Council and the Commission. In that context, particular consideration shall be given to financial contributions to fostering international solidarity and achieving the common priorities of the Union referred to in Regulation (EU) [on the preventive arm].

AddedThe Council and the Commission shall make a balanced overall assessment of all the relevant factors, specifically, the extent to which they affect the assessment of compliance with the deficit and/or the debt criteria as aggravating or mitigating factors. Where the Member State faces substantial public debt challenges as referred to in paragraph 3(a), it shall be considered a key aggravating factor. Favourable cyclical economic, budgetary and financial developments shall not be considered as mitigating factors, while unfavourable developments may be considered as mitigating factors.

Change 27

Changed5. Where Member States are allowed to deviate from their net expenditure path in the event of a severe economic downturn in the euro area or in the Union as a whole pursuant to Article 24 and Article 25 of Regulation (EU) [on the preventive arm], the Commission and the Council, in their assessment, may decide not to conclude on the existence of an excessive deficit.

Change 28

Changed1. Within two weeks of the adoption by the Commission of a report issued in accordance with Article 126(3) TFEU, the Economic and Financial Committee shall formulate an opinion in accordance with Article 126(4) TFEU. The opinion of the Economic and Financial Committee shall be made public.

Change 29

Changed3. The Council shall decide on the existence of an excessive deficit in accordance with Article 126(6) TFEU, as a rule within four months of the reporting dates established in Article 3(2) and (3) of Regulation (EC) No 479/2009. When it decides that an excessive deficit exists, the Council shall at the same time make recommendations to the Member State concerned in accordance with Article 126(7) TFEU. The Council shall make its decisions andunder recommendationsArticle 126(6) TFEU public.

Change 30

Changed4. The Council recommendation made in accordance with Article 126(7) TFEU shall establish a maximum deadline of six months for effective action to be taken by the Member State concerned. When warranted by the seriousness of the situation, the deadline for effective action may be three months. The Council recommendation shall also establish a deadline for the correction of the excessive deficit. In its recommendation, the Council shall also request that the Member State implements a corrective net expenditure path,path which ensures that the general government deficit remains or is brought and maintained below the reference value within the deadline set in the recommendation. ForWhere the excessive deficit procedure was opened on the basis of the deficit criterion, for the years when the general government deficit is expected to exceed the reference value, the corrective net expenditure path shall be consistent with a minimum annual structural adjustment of at least 0,5% of GDP as a benchmark.

Change 31

ChangedTheWhere correctivethe netexcessive expendituredeficit pathprocedure shallwas alsoopened puton the debtbasis ratioof onthe adebt plausiblycriterion, downwardthe pathcorrective leadingnet toexpenditure sustainablepath debtshall reductionbe orat keepleast itas atdemanding aas prudentthe levelnet havingexpenditure regardpath toadopted theby criteriathe establishedCouncil in accordance with Article 616 of Regulation (EU) [on the preventive arm]. The corrective netarm], expenditureand pathcorrect shallas ensurea thatrule the average annual fiscal adjustmentcumulated effortdeviations inof the first three years is at least ascontrol highaccount asby the average annual fiscaldeadline effortset ofby the total adjustment period.Council.

Change 32

Changed5. Within the deadline provided for in paragraph 4 of this Article, the Member State concerned shall report to the Council and the Commission on action taken in response to the Council’s recommendation under Article 126(7) TFEU. The report shall include the targets for government expenditure and revenue and for the discretionary measures on both the expenditure and the revenue side consistent with the Council’s recommendation, as well as information on the measures taken and the nature of those envisaged to achieve the targets. The reportMember shallState alsoshall includemake the opinionreport ofpublic. The Member State may invite the relevant independent fiscal institution ofto theproduce Membera Statenon-binding, concernedseparate report on the adequacysufficiency of the measures taken and envisaged with respect to the targets. The Member State shall make the report public.

Change 33

Removed6. Where effective action has been taken in compliance with a recommendation under Article 126(7) TFEU or where exceptional circumstances outside the control of the government with a major impact on the public finances of the Member State concerned, including on the respect of the corrective net expenditure path recommended by the Council pursuant to paragraph 4 of this Article, occur after the adoption of that recommendation, the Council may decide, on a recommendation from the Commission, to adopt a revised recommendation under Article 126(7) TFEU. The revised recommendation, taking into account the relevant factors referred to in Article 2(3) of this Regulation may, in particular, extend the deadline for the correction of the excessive deficit by one year as a rule. In case the Council has established the existence of a severe economic downturn in the euro area or in the Union as a whole in accordance with Article 24 of Regulation (EU) [on the preventive arm], the Council may also decide, on a recommendation from the Commission, to adopt a revised recommendation under Article 126(7) TFEU provided that this does not endanger fiscal sustainability in the medium term. The revised recommendation may, in particular, extend the deadline for the correction of the excessive deficit by one year as a rule.’;

Added6. The Council may decide, on a recommendation from the Commission, to adopt a revised recommendation under Article 126(7) TFEU where:

Added(a) effective action has been taken in response to such recommendation and the conditions referred to in Article 25 of Regulation (EU) [on the preventive arm] apply, or

Added(b) the conditions referred to in Article 24 of Regulation (EU) [on the preventive arm] apply.

AddedThe revised recommendation may, in particular, extend the deadline for the correction of the excessive deficit by one year as a rule.’;’

Change 34

ChangedWhere the Council establishes, in accordance with Article 126(8) TFEU, that the Member State concerned has failed to take effective action, it shall report to the European Council accordingly.’;accordingly.

Change 35

Added2. Any decision by the Council under Article 126(8) TFEU to make public its recommendations where it is established that no effective action has been taken, shall be taken immediately after the expiry of the deadline set in accordance with Article 3(4) of this Regulation.’;’

Change 36

Changed‘1.‘ 1. Any Council decision to give notice to the participating Member State concerned to take measures for the deficit reduction in accordance with Article 126(9) TFEU shall be taken within two months of the Council decision under Article 126(8) TFEU establishing that no effective action has been taken. In the notice, the Council shall request that the Member State implements a corrective net expenditure path which ensures that the general government deficit remains or is brought and maintained below the referencein valueaccordance withinwith the deadlinerequirements setestablished in the notice. For theArticle years3(4). whereThe theCouncil generalshall governmentalso deficitindicate ismeasures expectedconducive to exceed the referenceachievement value,of the corrective net expenditure path shall be consistent with a minimum annual adjustment of at least 0,5% of GDP as a benchmark.path.’;

Change 37

RemovedThe corrective net expenditure path shall also put the debt ratio on a plausibly downward path leading to sustainable debt reduction or keep it at a prudent level having regard to the criteria established in Article 6 of Regulation (EU) [on the preventive arm]. The corrective net expenditure path shall ensure that the average annual fiscal adjustment effort in the first three years is at least as high as the average annual fiscal effort of the total adjustment period. The Council shall also indicate measures conducive to the achievement of the corrective net expenditure path.’;

Change 38

Removed‘2. Where effective action has been taken in compliance with a notice under Article 126(9) TFEU or where exceptional circumstances outside the control of the government with major impact on the public finances of the Member State concerned, including on the respect of the corrective net expenditure path referred to in paragraph 1 of this Article, occur after the adoption of that notice, the Council may decide, on a recommendation from the Commission, to adopt a revised notice under Article 126(9) TFEU. The revised notice, taking into account the relevant factors referred to in Article 2(3) of this Regulation may, in particular, extend the deadline for the correction of the excessive deficit by one year as a rule. In case the Council has established the existence of a severe economic downturn in the euro area or in the Union as a whole in accordance with Article 24 of Regulation (EU) [on the preventive arm], the Council may also decide, on a recommendation from the Commission, to adopt a revised notice under Article 126(9) TFEU, on condition that it does not endanger fiscal sustainability in the medium term. The revised notice may, in particular, extend the deadline for the correction of the excessive deficit by one year as a rule.’;

Added‘2. The Council may decide, on a recommendation from the Commission, to adopt a revised notice under Article 126(9) TFEU where:

Added(a) effective action has been taken in response to such a notice and the conditions referred to in Article 25 of Regulation (EU) [on the preventive arm] apply, or

Added(b) the conditions referred to in Article 24 of Regulation (EU) [on the preventive arm] apply.

AddedThe revised notice may, in particular, extend the deadline for the correction of the excessive deficit by one year as a rule.’;’

Change 39

Changed‘1. The Council, when considering whether effective action has been taken in response to its notice made in accordance with Article 126(9) TFEU, shall base its decision on the report submitted by the Member State concerned in accordance with Article 5(1a) of this Regulation and its implementation, as well as on any other publicly announced and sufficiently detailed decisions by the government of the Member State concerned. The outcome of the surveillance mission carried out by the Commission in accordance with Article 10a of this Regulation shall be taken into account.’;account.’;’

Change 40

Changed3. A Council decision shall only be taken pursuant to Article 126(12) TFEU where budgetarythe forecastsdeficit ashas providedbeen bybrought below the Commissionreference indicatevalue thatand theis deficitprojected hasby beenthe broughtCommission durablyto belowremain so in the referencecurrent valueand following year and, where the excessive deficit procedure was opened on the basis of the debt criterion, the Member State concerned respected the corrective net expenditure path set by the Council in accordance with Article 3(4) or Article 5(1) of this Regulation over the previous 2 years and is projected to continue to do so in the current year on the basis of the Commission forecast.’;Regulation.’;’

Change 41

Changed(b) where the participating Member State concerned acts in compliance with notices given in accordance with Article 126(9) TFEU.’;TFEU.’;’

Change 42

Changed3. Where actual data pursuant to Regulation (EC) No 479/2009 indicate that an excessive deficit has not been corrected by a participating Member State within the time limits specified either in recommendations issued under Article 126(7) TFEU or notices issued under Article 126(9) TFEU, the Council shall immediately take a decision under Article 126(9) TFEU or Article 126(11) TFEU respectively.’;respectively.’;’

Change 43

Changed‘1. The Commission shall ensure a permanent dialogue with authorities of the Member States in accordance with the objectives of this Regulation. To that end, the Commission shall, in particular, carry out missions for the purpose of the assessment of the actual economic situation in the Member State and the identification of any risks or difficulties in complying with the objectives of this Regulation and allow an exchange with other relevant stakeholders, including the national independent fiscal institutions.’;institutions.’;’

Change 44

Changed‘2. Following the adoption by the Council of a notice under Article 126(9) TFEU, the Commission shall carry out a dedicated monitoring mission to the Member State concerned to discuss the measures that the Member State intends to take in response to the measures judged necessary following the notice under Article 126(9) TFEU.and Uponif invitationrequested by the parliament of the Member State concerned, the Commission may present its assessment of the economic and fiscal situation in the Member State. Enhanced surveillance may be undertaken for Member States which are the subject of recommendations and notices issued following a decision pursuant to Article 126(8) TFEU and decisions under Article 126(11) TFEU for the purposes of on-site monitoring. The Member States concerned shall provide all necessary information for the preparation and the conduct of the monitoring mission.’;mission.’;’

Change 45

Changed1. The amount of the fine shall amount to up to 0,05% of the latest estimate of the previous year’s GDP for a 6-month period and be paid every 6 months until the Council assesses that the Member State concerned has taken effective action in response to the notice issued under Article 126(9) TFEU.

Change 46

Changed2. In each 6-month period following that in which a fine is imposed, until the decision on the existence of an excessive deficit is abrogated, the Council shall assess whether the participating Member State concerned has taken effective action in response to the Council notice in accordance with Article 126(9) TFEU. In this semi-annual assessment the Council shall decide, in accordance with Article 126(11) TFEU, to intensify the sanctions, unless the participating Member State concerned has complied with the Council’s notice.notice.’;

Change 47

Removed3. The cumulated amount of the fines referred to in paragraphs 1 and 2 shall not exceed 0,5 % of GDP.’;

Change 48

RemovedIn accordance with Article 126(12) TFEU, the Council shall abrogate all outstanding sanctions if the decision on the existence of an excessive deficit is abrogated. Fines imposed in accordance with Article 12 of this Regulation will not be reimbursed to the participating Member State concerned.’;

AddedArticle 15

Removed(12) Articles 16 and 17 are deleted.

AddedIn accordance with Article 126(12) TFEU, the Council shall abrogate all outstanding sanctions if the decision on the existence of an excessive deficit is abrogated. Fines imposed in accordance with Article 12 of this Regulation will not be reimbursed to the participating Member State concerned.’;’

Change 49

Changed(13) in(12) Article 17a, paragraph 116 is replaced by the following:

Change 50

Removed‘1. By 31 December 2028 and every five years thereafter, the Commission shall publish a report on the application of this Regulation.

Added‘Article 16

RemovedThat report shall review at least:

AddedThe fines referred to in Article 12 shall constitute general revenue for the Union budget.’;’

Removed(a) the effectiveness of this Regulation;

Added(12a) Article 17 is deleted.

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Removed(b) the progress in ensuring closer coordination of economic policies and sustained convergence of economic performances of the Member States in accordance with the TFEU.

Added(13) Article 17a is replaced by the following:

Removed2. Where appropriate, the report referred to in paragraph 1 shall be accompanied by a proposal for amendments to this Regulation.

Added‘ 1. By 31 December 2030 and every five years thereafter, the Commission shall prepare a report on the application of this Regulation, accompanied, where appropriate, by a proposal to amend this Regulation. The Commission shall make that report public. The report shall review the effectiveness of this Regulation in achieving its objectives, as referred in Article 1 and the progress in ensuring closer coordination of economic policies and sustained convergence of economic performances of the Member States in accordance with the TFEU.

Change 51

Changed3. The report shall be forwarded to the European Parliament and to the Council.’;Council.’;’

Change 52

ChangedIt shall adopt the revised recommendation or notice together with the adoption of the recommendation pursuant to Article 16 of Regulation (EU) [on the preventive arm] setting the net expenditure path.’;path.’;’

Change 53

ChangedArticle 2 Entry into force

Change 54

ChangedThis Regulation shall enter into force on the […] day following that of its publication in the Official Journal of the European Union.

Change 55

ChangedFor the Council The President

Change 56

RemovedThe President

Removed9.11.2023

RemovedLETTER OF THE COMMITTEE ON BUDGETS

RemovedMs Irene Tinagli

RemovedChair

RemovedCommittee on Economic and Monetary Affairs

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RemovedBRUSSELS

RemovedSubject: Opinion on the Proposal for a Council Regulation amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (2023/0137(CNS))

RemovedDear Chair,

RemovedThe Coordinators of the Committee on Budgets decided at their meeting of 23 May 2023 to adopt an opinion in the form of a letter under Rule 56 concerning the Proposal for a Council Regulation amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (2023/0137(CNS)), which was presented as part of the legislative package on the Economic Governance Review on 26 April 2023.

RemovedIn my capacity as BUDG Chair, I hereby provide you with the BUDG contribution on the Commission proposal.

RemovedThe BUDG committee welcomes that the Commission proposed a legislative package and reminds its previous call for a revision of the Stability and Growth Pact “in order to promote a just, sustainable and future-oriented economy”.

RemovedAlthough the BUDG committee shares the overarching objective of the legislative package, it also stresses that the reform of the economic governance framework needs to go hand in hand with enhanced democratic accountability. In this regard, the BUDG committee deplores that the European Parliament is not involved in all aspects of the reform on equal footing with the Council, but is merely consulted on the proposed Council Regulation on speeding up and clarifying the implementation of the excessive deficit procedure.

RemovedAs regards the content of the proposed Council Regulation, the BUDG committee strongly supports the Commission’s proposal to delete Article 16 of the legal act, which assigns the revenues of fines imposed on Member States in accordance with Article 12 of the Regulation to the European Financial Stability Facility. Making fines under the excessive deficit procedure available to the EU budget as ‘other revenue’ would be fully in line with Parliament’s long-standing position that fines should be used as additional revenue for the Union budget. Should the proposal be taken up in the final act, the BUDG committee stands ready to ensure that the required legislative changes to the Financial Regulation, namely in Article 21(2), are adopted without delay.

RemovedFinally, the BUDG committee is concerned that a conclusion of the negotiations before the end of 2023 may not be possible and urges for a speeding up of the discussions.

RemovedThe BUDG committee asks the ECON committee, as the committee responsible for the file, to take due account of the suggestions mentioned in this opinion in the form of a letter, pursuant to Rule 56, in its report on the proposal on speeding up and clarifying the implementation of the excessive deficit procedure.

RemovedYours sincerely,

RemovedJohan van Overtveld

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https://news.eu-parl.st-solutions.dev/texts/A-9-2023-0444/compare/TA-9-2024-0312
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Cite as

European Parliament (2024). “Changes between A-9-2023-0444 and TA-9-2024-0312”. Text, 23 April 2024. from A-9-2023-0444, to TA-9-2024-0312. EU Parl Watch Research. https://news.eu-parl.st-solutions.dev/texts/A-9-2023-0444/compare/TA-9-2024-0312 (retrieved 25 September 2026). Data: European Parliament Open Data, https://data.europarl.europa.eu/ (CC BY 4.0).
BibTeX 
@misc{epw-text-2024-04-23,
  author = {{European Parliament}},
  title = {{Changes between A-9-2023-0444 and TA-9-2024-0312}},
  year = {2024},
  date = {2024-04-23},
  howpublished = {\url{https://news.eu-parl.st-solutions.dev/texts/A-9-2023-0444/compare/TA-9-2024-0312}},
  url = {https://news.eu-parl.st-solutions.dev/texts/A-9-2023-0444/compare/TA-9-2024-0312},
  urldate = {2026-09-25},
  publisher = {EU Parl Watch Research},
  note = {Text. from A-9-2023-0444, to TA-9-2024-0312. Data: European Parliament Open Data (CC BY 4.0)}
}